Acc Ch 5

Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. This is an example of a: A. Sales revenue. B. Sales discount. C. Sales return. D. Sales allowance.

C. Sales Return

Compared to other methods of estimating uncollectible accounts, the aging of accounts receivables method tends to: A. Be more accurate. B. Result in the highest net income. C. Result in the lowest net income. D. Recognize bad debts earlier.

A. Be more accurate

The amount of cash that is actually expected to be collected on accounts receivable is referred to as: A. Net realizable value. B. Allowance for uncollectible accounts. C. Net income. D. Net revenue.

A. Net realizable value

The first step in using a balance sheet approach to estimate bad debts is to calculate the desired ending balance in which account? A. Accounts receivable. B. Allowance for uncollectible accounts. C. Bad debt expense. D. Credit sales.

B. Allowance for uncollectible accounts.

At the beginning of 2018, the balance in Jackson Enterprises' Allowance for Uncollectible Accounts was $31,800. During 2018, the company wrote off $38,000 of accounts receivable. Writing off the individual bad debts would include a: A. Debit to Bad Debt Expense. B. Credit to Accounts Receivable. C. Credit to the Allowance for Uncollectible Accounts. D. Debit to Bad Debt Expense; credit to the Allowance for Uncollectible Accounts.

B. Credit to Accounts Recievable

For accounts receivable, the longer an account is outstanding, the: A. Better the customer. B. More likely it will prove uncollectible. C. More likely the customer will return. D. Higher probability of it being collected.

B. More likely it will prove uncollectible.

When customers purchase products on account, Spitz Manufacturing offers them a 2% reduction in the amount owed if they pay within 10 days. This is an example of a: A. Bad debt. B. Sales discount. C. Sales return. D. Sales allowances

B. Sales Discount

Under the allowance method, which of the following does not change the balance in the Accounts Receivable account? A. Returns on credit sales. B. Collections on customer accounts. C. Bad debt expense adjustment. D. Write-offs.

C. Bad debt expense adjustment

Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record this reduction by crediting Accounts Receivable and debiting: A. Sales Revenue. B. Sales Discounts. C. Sales Returns. D. Sales Allowances

D. Sales Allowances

Which of the following is recorded by a credit to Accounts Receivable? A. Sale of inventory on account. B. Estimating the annual allowance for uncollectible accounts. C. Estimating annual sales returns. D. Write-offs of bad debts.

D. Write-offs of bad debts.